Hourly to Salary Converter

How this is worked out

The conversion is plain arithmetic. Hourly to annual multiplies by hours a week and weeks a year; annual to hourly divides by the same. ₹800 an hour over a 45-hour week for 52 weeks is ₹18,72,000 — 2,340 paid hours. ₹12,00,000 a year over the same hours is ₹512.82 an hour.

annual = hourly × hours per week × paid weeks

The freelance mode is the one that earns its place. It works backwards from the money you want to keep, adds back the tax and the business costs, and divides by the hours you can actually bill — which is never the hours you work. At a target of ₹18,00,000, 25 billable hours a week, five weeks off, ₹2,00,000 of overhead and an 18% effective tax rate, you need to charge ₹2,038 an hour and bill ₹23,95,122 over the year.

That is two and a half times the ₹865 an hour a ₹18,00,000 salary works out to, and the gap is not greed. It is unbillable time, overhead, no paid leave, no employer EPF, no gratuity, and no ESI.

And CTC is a third number again. Cost to company includes the employer's 12% EPF contribution, gratuity accrual, and often insurance and notional allowances. None of it reaches your bank account this month and none of it is in a contract rate. Comparing a CTC with a freelance rate without stripping it back is the commonest mistake in Indian rate negotiation, and it runs in the employer's favour every time.

A worked example

CTC, gross, and what reaches your account

Three numbers get called "salary" in India and they are not close to each other. CTC is what you cost your employer: gross salary plus the employer's 12% EPF contribution, plus gratuity accruing at roughly 4.8% of basic, plus insurance and sometimes notional line items that exist to make the figure larger. Gross salary is what the offer letter promises before deductions. Take-home is what lands after income tax, your own 12% EPF and professional tax.

The gap between the first and the last is routinely 20–30% of CTC, and the employer's EPF contribution is real money going into a real account in your name — it is simply not spendable this month and not part of a contract rate.

When an employer compares a ₹20,00,000 CTC with a freelancer's ₹20,00,000 of billings, they are comparing a figure that includes their own statutory contributions against one that includes none. Strip the employer EPF and the gratuity out before the two numbers can be set against each other at all.

What a contract rate has to fund that a salary does not

Paid leave, first. It comes from your state's Shops and Establishments Act rather than from a national rule — fifteen earned-leave days a year is the common floor, plus casual and sick leave — and a contract rate contains none of it. Every day you do not work is a day you do not bill.

Then the employer contributions you no longer receive. No 12% of basic into EPF. No gratuity accruing. No ESI, so no employer-funded medical cover: your own health insurance is now an overhead, and so is professional indemnity if you work in a field where a client can sue.

And unbillable time, which is the line people forget entirely. Selling, scoping, invoicing, chasing payment, accounting, GST returns and learning are all compulsory and none of them is billable. Twenty-five billable hours in a forty-five hour week is a realistic ratio, not a pessimistic one, and it is why the rate has to be multiples of the salary equivalent rather than a little above it.

TDS under 194J, and why your first invoice pays 90%

A client paying professional fees deducts 10% tax at source under section 194J before the money reaches you. Invoice ₹1,00,000 and ₹90,000 arrives. This is not a discount and not a fee — it is your own tax, paid early, and you reclaim the excess when you file your return.

The practical consequence is a cash-flow gap measured in months, not a smaller fee. If your actual liability is lower than 10% of gross receipts — which it very often is under presumptive taxation — you are lending the government the difference until your refund arrives. Plan working capital around it rather than being surprised by it.

You can see everything deducted in your name in Form 26AS and the annual information statement. Reconcile them against your own invoices before filing; a client who deducted TDS but did not deposit it is a problem you want to find in June rather than in the assessment.

Presumptive taxation, and GST at ₹20 lakh

Section 44ADA lets a professional with gross receipts up to ₹75 lakh declare 50% of them as profit and pay tax on that figure, with no books of account and no audit. For a freelancer whose real costs are well under half of receipts, that is a materially lower effective tax rate than a slab calculation on actual profit would give — which is why this page defaults India to 18% where the other four markets use 30% or more.

It is an election with conditions and consequences, including on how long you must stay in it. Whether it applies to what you do, and whether it is the better choice for you, is a question for a chartered accountant rather than for a calculator.

GST is separate and is not income. Once your annual receipts pass ₹20 lakh for services you must register and charge GST on your invoices — 18% for most professional services. You collect it and remit it; it never belongs to you. But it changes what your client is quoted, and a client who budgeted ₹10,00,000 inclusive is offering you ₹8,47,458 of fee. Agree whether a quoted figure is inclusive or exclusive before the engagement starts, in writing.

Assumptions and sources

Conversion arithmetic

Hourly × hours × paid weeks, and the reverse. A calendar year is 52.1775 weeks; 52 is the payroll convention. Verified in tools/test/work.mjs.

Freelance rate model

Target income grossed up for tax and overhead, divided by billable hours. Computed in assets/js/tools/work.js and verified against an independent implementation.

Employer EPF and gratuity

Employer contributes 12% of basic to EPF; gratuity accrues on top. Held with sources in assets/js/tax/in-2026-27.js and assets/js/tax/retirement-2026.js. checked 2026-09

TDS on professional fees

Section 194J of the Income Tax Act — 10% deducted at source on professional and technical fees, reclaimed on filing. checked 2026-09

Presumptive taxation

Section 44ADA — 50% of gross receipts declarable as profit for a professional with receipts up to ₹75 lakh, no books and no audit. Whether it applies to you is a question for a chartered accountant. checked 2026-09

GST registration threshold

₹20 lakh of annual aggregate turnover for services, halved in the special-category states. Held with its source in assets/js/tax/in-2026-27.js. checked 2026-09

Paid leave

A state entitlement under each state's Shops and Establishments Act, not a national rule. Fifteen earned-leave days is a common floor; the detail differs by state.